Infrastructure sharing: why – what - & how?

<p style="text-align:justify;">Working and helping some MNOs about infrastructure sharing, I thought to be useful in writing a post about it. I would like your comments about this still fancy question… </p> <p style="text-align:justify;"><em>what about infrastructure sharing in mobile telecommunications?</em></p> <p>Should MNOs share infrastructures?</p> <p style="text-align:justify;">Each market’s context dictates his specific answer. For starters MNOs have to review their <strong>financial goals</strong> and <strong>growth</strong> (especially infrastructure’s one), <strong>competition</strong> and <strong>consolidation</strong> within their market.</p> <p style="text-align:justify;"><strong>Money talks!</strong> And financial results are sometimes far behind what they were some years ago for some MNOs… Sharing infrastructure’s O&amp;M OPEX makes especially sense these times. Bottom lines would be positively affected and this would be good news.</p> <p style="text-align:justify;">Unique subscriber base growth - especially in EU - is told to be now some percent Year-on-Year (as per GSMA Insights’ figures). So, if no massive additional infrastructure is needed sharing infrastructure might be an option. This said, keep in mind that Mobile Data is still growing big time especially in Western Europe, at about10% quarter-on-quarter as per GSMA’s. This means quite some additional – at least active – infrastructure.</p> <p style="text-align:justify;">When competition gets really fierce about services and tariffs but not that much on infrastructure, it makes sense competing on services and tariffs while sharing infrastructure. This said keep in mind that over time some MNOs differentiate themselves with infrastructure - by getting better4G (and sometimes3G) coverage, or when competing with new entrants with small coverage.</p> <p style="text-align:justify;">Besides, because consolidation is coming through some markets, sharing might be anticipating a situation that will eventually come as a reality…</p> <p style="text-align:justify;"> </p> <p style="text-align:justify;">So, should MNOs share infrastructure? Sometimes yes, sometimes no, but as a matter of fact, they definitely need to walk through the question…</p> <p>What should they share?</p> <p style="text-align:justify;">There is quite options when it comes to sharing infrastructure. From fast forward easy options to the really deep and operationally intimate ones all kind of opportunities might be assessed.</p> <p style="text-align:justify;">Easiest is still <strong>passive infrastructure</strong> sharing. <strong>Dark fiber</strong> or <strong>basic</strong> <strong>conduit sharing</strong> is a great option massively used to reduce backbone and backhaul costs. With growing data consumption, this pretty simple option helps in increasing both wide and deep coverage.</p> <p style="text-align:justify;">Still passive but sometimes more complex to implement, <strong>site sharing</strong> enables to reduce O&amp;M OPEX costs but also CAPEX when it comes to new sites. By the way, this option, enable also better deep indoor coverage since new sites are available to densify coverage.</p> <p style="text-align:justify;"> </p> <p style="text-align:justify;">Then comes the active infrastructure sharing <strong>RAN sharing</strong> is nowadays more and more available especially in LTE roll-out. Since3GPP release8 standardizes network sharing for LTE – see Alastair Brydon’s post on <a href="http://www.unwiredinsight.com/2013/3gpp-lte-ran-sharing-enhancements"><span>UNWIRED INSIGHT BLOG</span></a> – it helps big time in engineering and operating this model.</p> <p style="text-align:justify;">Definitely LTE is not the only way to get RAN sharing a reality.3G and2G are still – by far – the most part of MNOs’ networks. Interestingly, only some examples are up and running (UK, Finland, Sweden…) but not that many…</p> <p style="text-align:justify;">RAN Sharing enables usually better coverage in <strong>rural areas</strong> especially to reach geographically remote regions, but might also strengthen <strong>deep indoor</strong> broadband coverage.</p> <p style="text-align:justify;"> </p> <p style="text-align:justify;">Even <strong>International Infrastructures</strong> might be shared between MNOs. Managing voice, SMS and data agreements can be done since these services are more and more utilities from the customers’ point of view. Major Telecommunication groups are already sharing those infrastructures and knowledge by setting up Wholesale’s group entities. This doesn’t mean that smaller MNOs shouldn’t do the same by aggregating their volumes and negotiating together.</p> <p> </p> <p> </p> <p> </p> <p>How should they share?</p> <p style="text-align:justify;">This is not a “take-away” methodology… I don’t aim to provide a standard process or “how-to” about Sharing. I just want to give some insights based on my experiences. </p> <p style="text-align:justify;">As usually, setting up the target is step one. MNO’s Top Management needs to define infrastructure sharing’s<strong> main goal</strong>. Is it costs cutting (OPEX or CAPEX), adding or densifying coverage, speeding up its roll out…</p> <p style="text-align:justify;">Then <strong>Regulatory considerations</strong> will help to define what can actually be shared and what’s not. Depending on the country’s (or region) telecom policy, all kinds of sharing aren’t allowed. So, Regulatory approval and discussions are mandatory about sharing.</p> <p style="text-align:justify;">At this stage, a <strong>high level business case</strong> evaluation will enable to decide if going further makes sense.</p> <p style="text-align:justify;">Then MNO needs to <strong>find the right partner</strong>. Usually there are not that many choices… But having Top Management’s as well as field teams’ cooperation is a prerequisite that will enable or kill the project. And there comes what all is about… <strong>Cooperation</strong>!</p> <p style="text-align:justify;">Defining precisely <strong>what should be shared</strong> and how deeply the sharing should go comes as first negotiation with the partner.</p> <p style="text-align:justify;">Then a <strong>detailed business case</strong> will provide first inputs to defining project’s<strong> KPIs</strong> (Financial, Operational and in terms of customer experience’s Quality) will allow to rate each upcoming step and decide whether to proceed or not. </p> <p style="text-align:justify;">Usually a <strong>field test</strong> should come next. Obviously sharing’s running success is all about defining right processes and operational cooperation between both MNOs’ teams. The more the sharing is deep and complex, the more the field test will be mandatory. It will enable to align details that will in the end make the overall sharing project a big success or just another one. When, and if, the field test provides successful results based on the KPIs defined initially, then detailed processes will be defined to support the upcoming roll-out phase.</p> <p style="text-align:justify;">In the <strong>roll-out phase</strong> being able to adjust all process and provide flexibility on both sides will be critical. A periodical <strong>review of project’s KPI</strong> with both management teams will ensure long term success.</p> <p style="text-align:center;">-</p> <p> </p> <p style="text-align:justify;">Infrastructure sharing is a long and complex process involving not only technical teams. Thus <strong>MNO’s Top Management needs to be deeply</strong> involved and provide decisive support into each decision to carry the project into success.</p> <p> </p>